Goldman Sachs Posts Big Profits as SEC Suit Awaits
Goldman Sachs has demonstrated a remarkable ability to keep pulling in the profits — and bestowing bonuses on company execs — regardless of the state of the global economy, and despite what the bank might have done to damage it in the first place. On Tuesday, Goldman reported that its first-quarter profits doubled over the same period last year, but as The Associated Press noted, certain other pressing matters at least partially overshadowed this news.
In other related headlines, at least one Republican lawmaker is crying foul over the SEC’s decision to sue Goldman and the timing of same. –KA
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AP via Google News:
As Goldman Sachs Group Inc. executives held conference calls with banking industry analysts and reporters Tuesday, the questions focused more on the Securities and Exchange Commission’s civil fraud charges against the company rather than its $3.3 billion earnings.
And the company came under scrutiny abroad. Britain’s financial regulator said it had begun an investigation into Goldman Sachs International, the bank’s London-based operations. The announcement from the Financial Services Authority follows pressure from Prime Minister Gordon Brown, who over the weekend accused Goldman of “moral bankruptcy” for planning to pay big employee bonuses despite the investigation.
The SEC charges grow out of a 2007 transaction involving collateralized debt obligations, or CDOs, exotic mortgage-related securities that many analysts say helped accelerate the financial crisis and recession. The government said Goldman Sachs did not tell two clients that the CDOs they bought were crafted in part by billionaire hedge fund manager John Paulson, who was betting on them to fail.
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